Check Msme Credit Guarantee Scheme 2024 : Apply Online. collateral free loan for msme Yojana Registration.
Msme Credit Guarantee Scheme
MSMEs constitute a crucial pillar of India’s economy, contributing around 30% to the GDP, 45% to manufacturing output, and employing a significant portion of the population. The Government of India has taken proactive steps to ensure timely access to benefits from various MSME schemes. The Union Budget 2024-25 specifically targets improving the ease of doing business for MSMEs.
Key initiatives include streamlining processes to facilitate smoother operations and growth opportunities for these enterprises. These measures are aimed at fostering a conducive environment for MSMEs to thrive, thereby enhancing their contribution to India’s economic landscape.
Key Highlights of Credit Guarantee Fund Scheme (CGMSE) :
- ECLGS: Provided credit to over 130 lakh MSMEs, extended until March 2023 with an expanded guarantee cover totaling INR 5 Lakh Cr.
- CGTMSE: Facilitating INR 2 Lakh Cr additional credit for Micro and Small Enterprises.
- RAMP programme: Outlay of INR 6,000 Cr to accelerate MSME growth.
- MSME Self-Reliant India Fund: INR 50,000 Cr equity infusion to strengthen MSME sector resilience.
- Interlinked Portals: Udyam, e-Shram, NCS, and ASEEM portals interconnected for real-time databases and delivery of G2C, B2C, and B2B services, including credit facilitation, skilling, and recruitment.
- Udyam Assist Platform (UAP): Launched to formalise Informal Micro Enterprises (IMEs) for accessing Priority Sector Lending benefits.
Introduction :
- MSMEs in India: 26 million firms, employing 60 million people.
- Sector contribution: 45% of manufacturing output, 40% of exports.Key issue: Lack of timely, collateral-free credit at reasonable rates.
Credit Guarantee Fund Scheme (CGMSE) :
1. Launched to provide collateral-free credit to MSEs.
2. Managed by CGTMSE since August 2000.
3. Funded by Government and SIDBI in a 4:1 ratio.
Annual Guarantee Fee (AGF) structure under the Credit Guarantee Scheme (CGS – I) :
| Slab | Standard Rate (per annum)* |
|---|---|
| 0-10 lakh | 0.37 |
| Above 10-50 lakh | 0.55 |
| Above 50-1 crore | 0.60 |
| Above 1-2 crore | 1.20 |
| Above 2-5 crore | 1.35 |
*Note : Rates are in percentage (%) per annum.
Eligible Lending Institutions :
- Includes commercial banks (PSBs, private, foreign), select RRBs, NSIC, NEDFi, and SIDBI.
- 112 registered MLIs as of March 2010.
Objective :
- Encourage first-generation entrepreneurs towards self-employment.
- Provide credit guarantee funding for loans without the need for third-party guarantees or collateral.
Key Benefits :
- Guarantee coverage for loans up to INR 2 crores.
- No requirement for third-party guarantees or collateral.
- Coverage ranges from 75% to 85%, with micro-enterprises up to INR 5 lakhs eligible for 85% coverage.
- 50% coverage specifically for retail activities.
Scheme Applicable For : Current entrepreneurs and aspiring entrepreneurs.
Detailed Information :
- Facilitation of third-party/collateral-free credit by eligible institutions, with maximum credit capped at INR 200 lakhs.
- Recently extended to selected Small Finance Banks and NBFCs.
- Guarantee covers 50%, 75%, 80%, or 85% of the sanctioned credit amount.
- 85% coverage for micro-enterprises up to INR 5 lakhs.
- 80% coverage for MSMEs owned/operated by women and loans in the North East Region, up to INR 50 lakhs.
- In case of default, the Trust settles 75% of the extended amount for credits up to INR 200 lakhs.
Eligible Credit Facility :
a. Covers term loans and working capital up to Rs.100 lakh per enterprise.
b. No collateral / security required; applicable to new and existing MSEs.
Guarantee Cover :
- Guarantees 75% (80% for certain categories) of sanctioned credit amount.
- Settles claims in case of default on principal or outstanding amounts.
Tenure of Guarantee :
Covers the term of the loan or up to 5 years for working capital.
Fee for Guarantee :
- One-time fee of 1.5% (1% for loans ≤ Rs.5 lakh) and annual fee of 0.75% (0.5% for loans ≤ Rs.5 lakh).
- Reduced fees for loans in the North-East Region.
Scheme Awareness Programmes :
- Multi-channel approach: print, electronic media, workshops, seminars.
- Participation in exhibitions and meetings to promote awareness.
- Training initiatives for MLIs.
How to Apply for MSME Credit Guarantee Scheme ?
Applying for the MSME Credit Guarantee Scheme (CGTMSE) involves several steps, typically handled through the participating lending institutions. Here’s a general guide on how to apply:
- Eligibility Check : Ensure your enterprise qualifies as a Micro or Small Enterprise (MSE) under the definition provided by the Government of India.
- Preparation : Gather necessary documents including business registration details, financial statements, project report (if applicable), and KYC documents of promoters.
- Selection of Lending Institution : Identify a participating lending institution registered with CGTMSE. These include scheduled commercial banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), and some Non-Banking Financial Companies (NBFCs).
- Application Submission : Approach the chosen lending institution and submit your application for a loan under the CGTMSE scheme. Provide all required documents and information as per the institution’s checklist.
- Evaluation : The lending institution will evaluate your application based on their internal credit assessment norms and CGTMSE guidelines. They will determine the loan amount, tenure, and interest rate applicable to your case.
- Guarantee Fee Payment : If your loan application is approved, you may need to pay a one-time guarantee fee and an annual service fee to CGTMSE, as applicable based on the loan amount.
- Loan Disbursement : Once approved and after fulfilling any additional formalities (if any), the loan amount will be disbursed to your enterprise account.
- Coverage Under CGTMSE : Your loan will then be covered under the CGTMSE scheme, providing the necessary credit guarantee to the lending institution.
Operational Highlights of CGTMSE :
1. Approved 3,00,105 proposals totaling Rs.11,550.61 crore by March 2010.
2. Extended credit through 85 MLIs across 35 States / UTs.
Operational Highlights of CGTMSE :
| Financial Year | Active MLIs | Proposals Approved (Rs. in Lakh) |
|---|---|---|
| FY 2000-01 | 9 | 951 |
| FY 2001-02 | 16 | 2296 |
| FY 2002-03 | 22 | 4955 |
| FY 2003-04 | 29 | 6603 |
| FY 2004-05 | 32 | 9516 |
| FY 2005-06 | 36 | 16284 |
| FY 2006-07 | 40 | 27457 |
| FY 2007-08* | 47 | 30825 |
| FY 2008-09* | 57 | 53708 |
| FY 2009-10* | 85 | 151387 |
*Note : FY 2007-08, FY 2008-09, and FY 2009-10 had asterisks indicating significant growth in the number of active MLIs and approved proposals.
Eligibility Criteria :
- CGTMSE provides guarantee cover up to Rs 500 lakh for credit facilities sanctioned without collateral security or third-party guarantees to both new and existing Micro and Small Enterprises in manufacturing and services sectors.
- Recently introduced Hybrid Security product allows MSE units with partial collateral to be covered under CGTMSE, with a maximum coverage of Rs 5.00 Crore for the portion of loan not secured by collateral.
- ITPAN & Udyam Registration Number/Udyam Assist Certificate are mandatory for obtaining coverage under CGTMSE.
- Loans sanctioned under the Agriculture segment and Self Help Groups (SHGs) are not eligible for coverage under CGTMSE.
- Guarantee coverage and fee structure are as per CGTMSE guidelines, subject to periodic revisions.
- Banks charge an additional 10% fee on top of CGTMSE charges, with the current risk premium set at 30% of the fees levied by CGTMSE.
Documents Needed for MSME Credit Guarantee Scheme :
- Business Registration Documents : Certificate of Incorporation/Registration (for companies) or Partnership Deed (for partnerships). Memorandum of Association and Articles of Association (for companies).
- Identity Proof : Aadhaar Card, Passport, Voter ID, PAN Card, or any other government-issued identity proof of the enterprise’s promoters /partners /directors.
- Address Proof : Utility bills (electricity, water, telephone), Lease/Rental Agreement, Property Tax Receipt, etc., for the registered office/business premises.
- Bank Statements : Recent bank statements (typically for the last 6 months) of the enterprise’s main operating account.
- Financial Documents : Audited /Projected Balance Sheets and Profit & Loss Statements for the past 2-3 years (if applicable). Income Tax Returns (ITR) for the previous 2-3 years. Cash Flow Statements and/or Bank Statements demonstrating cash flow.
- Project Report / Business Plan : Detailed project report or business plan outlining the purpose of the loan, how it will be utilized, and expected outcomes.
- KYC Documents : KYC documents of the enterprise’s promoters /directors /partners, including Aadhaar Card, PAN Card, and Passport-sized photographs.
- Other Documents : Any specific documents required by the lending institution or CGTMSE for processing the application. In case of Hybrid Security product, details of collateral offered (if applicable).
OFFICIAL WEBSITE >> cgtsi.org.in >> MSME Credit Guarantee Scheme
CLICK HERE to access the official notification regarding MSME Credit Guarantee Scheme
Click Here to Check MSME Schemes 2024
- Msme Credit Guarantee Scheme
- Introduction :
- Credit Guarantee Fund Scheme (CGMSE) :
- Annual Guarantee Fee (AGF) structure under the Credit Guarantee Scheme (CGS – I) :
- Eligible Lending Institutions :
- Objective :
- Key Benefits :
- Detailed Information :
- Eligible Credit Facility :
- Guarantee Cover :
- Tenure of Guarantee :
- Fee for Guarantee :
- Scheme Awareness Programmes :
- How to Apply for MSME Credit Guarantee Scheme ?
- Operational Highlights of CGTMSE :
- Operational Highlights of CGTMSE :
- Eligibility Criteria :
- Documents Needed for MSME Credit Guarantee Scheme :
- OFFICIAL WEBSITE >> cgtsi.org.in >> MSME Credit Guarantee Scheme
- Related
The reality is that the banks don’t willing to section loans in the past n don’t know what they would do now to msme after these announcements .My banks are Indian Bank n Central Bank of India n both can saction easily because I am their old account holder as MSME